Defined Benefit Division and Accumulation 2

Transcription

1 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Issued 1 October 2015 by UniSuper Limited ABN A A DBD member, Associate Professor Elizabeth Koch OAM, Elder Conservatorium of Music, the University of Adelaide

2 About this Product Disclosure Statement This PDS has been prepared and issued by UniSuper Limited as Trustee of UniSuper. This PDS is for UniSuper Defined Benefit Division (DBD) and Accumulation 2 members. It contains the membership application form and describes the important features of membership, including the benefits and risks and how fees, costs and taxes may apply. The information in this PDS will help you make important choices about your super. In conjunction with this PDS, it is important that you read the How we invest your money, Insurance in your super and What happens to your inbuilt benefits if you choose Accumulation 2? booklets (which are incorporated by reference in this PDS) prior to making any decisions for your super. If you would like to request a paper copy (free of charge) of this PDS or any of the incorporated important information booklets that are referred to, please call us on or you can access at unisuper.com.au/pds. The information provided in this PDS is of a general nature only and does not take into account your personal financial situation or needs. You should therefore consider whether it is appropriate for your personal circumstances before relying on it and you should consider obtaining financial advice tailored to your personal circumstances before making a decision about this product. To the extent that this PDS contains any information which is inconsistent with the UniSuper Trust Deed and Regulations, (together, the Trust Deed), the Trust Deed will prevail. Information in this PDS is current as at the date of issue. Information contained in this PDS which is not materially adverse may change from time to time. Updated information can be found on our website or by calling us. You will be given notice of material changes or significant events within timeframes required by law. UniSuper Management Pty Ltd, SuperRatings Pty Limited, Chant West Pty Limited and Selecting Super (Pty Ltd) have consented to their logo and/or statements being included in this booklet, in the form and context in which they have been included, and consent has not been withdrawn as at the date of this booklet. IN THIS PDS UniSuper is referred to as UniSuper or the Fund, ABN UniSuper Limited is referred to as USL or the Trustee, ABN UniSuper Management Pty Ltd is referred to as USM, ABN , Australian Financial Services Licence (AFSL) No , MySuper Authorisation No The Trustee has delegated administration of the Fund to USM, which is wholly owned by USL in its capacity as Trustee of the Fund. USM s AFSL authorises it to deal in financial products and to provide financial product advice to members, which it does through UniSuper Advice. External insurance cover is provided to UniSuper through group insurance policies the Trustee has taken out with TAL Life Limited, ABN , AFSL No (referred to as our Insurer throughout this document). 01 Overview About UniSuper 4 How super works 9 Getting started 12 Choose your style of super 16 What are the DBD and Accumulation 2? 18 Insurance and inbuilt benefits 20 Joining UniSuper or transferring to the DBD 21 Still not sure which type of super will suit you best? 22 Risks of super months to make a decision about your membership 26 UniSuper Limited 2015

3 Defined Benefit Division and Accumulation 2 Product Disclosure Statement contents Defined Benefit Division What is the defined benefit division? 28 Risks associated with defined benefits 30 Making contributions 31 Inbuilt benefits 32 Insurance cover through your accumulation component 33 Your super 34 Accumulation 2 What is Accumulation 2? 42 Insurance 42 Making contributions 43 Accumulation 2 membership types of benefits 45 General information Making contributions 48 Investment options 58 Inbuilt benefits and insurance 60 Risks of super 61 Accessing your benefit 65 Fees and costs 69 How super is taxed 77 Other information 81 Glossary and important definitions 87

4 2 How to read this PDS We know that super can be complex, so we ve tried to make it as easy as possible for you to understand the features of your membership, the decisions you can make and what you can do now to make the most of your super. The terms of your employment mean that you are now a Defined Benefit Division (DBD) member. This is a product that we re proud to offer, with a long history and unique design. Because we know that the DBD may not suit everyone, we offer our members the option to permanently transfer to the Accumulation 2 Division of the Fund (Accumulation 2) within the first 24 months of membership. Accumulation 2 is the type of account you re probably more familiar with, being similar in style to a personal account in which your superannuation contributions are accumulated, as well as any investment returns (which could be positive or negative) less any fees, costs, charges, premiums and taxes. This Product Disclosure Statement (PDS) explains these two types of super, highlights some decisions you may want to make through the life of your membership, and provides you with information to assist you with those decisions. This PDS is broken up into four sections: 01 Overview Part 1 introduces UniSuper and explains the basic characteristics of the DBD and Accumulation 2. It also highlights some key decisions to consider and provides some general information relevant to those decisions. 02 Defined Benefit Division Part 2 provides more detailed information particular to the DBD. 03 Accumulation 2 Part 3 provides more detailed information specific to Accumulation Other information Part 4 covers the general, but important, information relevant to both the DBD and Accumulation 2. This includes making contributions, how your super is taxed, and the fees and costs that apply. find out more You can visit our website unisuper.com.au for more information or call us on

5 01 Overview

6 4 About UniSuper Since 1983, we ve been Australia s only super fund dedicated to people who work in the higher education and research sector. With approximately $50 billion in funds under management and over 400,000 members, we are one of Australia s largest super funds. Since inception we ve helped over 1.1 million Australians in saving and preparing for retirement. We are committed to providing competitive and high-quality retirement saving products and services to our members, as well as a range of investment options. Benefits of UniSuper membership with you all the way No matter where you work or what you do, you can keep your super with us for life. That way we can continue to help you build and manage your super and achieve your retirement goals. Whether you re: starting out in the workforce progressing in your career changing jobs winding down your work hours taking a well-earned break, or transitioning-to-retirement. We offer a range of products and investment options to help you achieve your goals. Download or order over the phone You can download any of our documents including this PDS and related important information booklets at unisuper.com.au/pds. If you d prefer a paper copy, you can order one free of charge by calling us on Stay with us even if you leave your employer You have the option to keep your super with us if you leave the higher education and research sector. If you re eligible for Choice of Fund, you can ask your new employer to pay your Superannuation Guarantee contributions into your existing UniSuper account. Access our competitive pension products You can take out a UniSuper pension when you retire or in the lead-up to retirement as part of a transition to retirement strategy. We have a range of Pension options to help our members continue to benefit from our competitive fees and returns. For more information, refer to the relevant Pension PDS and/or Your guide to a better retirement booklet available from unisuper.com.au/pds or by calling us on Competitive fees Our fees are consistently amongst the most competitive in the industry and we strive to offer great value, excellent service and relevant choice to our members. As a member, you won t be charged for: any entry or exit fees, or the first investment option switch you make each financial year. We don t pay commissions to financial advisers and don t pay external shareholder dividends.

7 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview 5 Control and choice over your investments Everyone has different needs when it comes to investments. So we offer you the flexibility and freedom to choose your own investment strategy. We offer a wide range of carefully built investment options, including sustainable options, which you can combine to create your own portfolio or leave it to our team of experts via one of our pre-mixed diversified investment options. A record of strong long-term investment performance We re proud to have achieved returns that have exceeded industry benchmarks and averages for many of our investment options. 1 For example, our Balanced option has achieved returns that place it in the first quartile (top 25%) over one, three, five, seven and 10 years. 2 And for the financial year our Balanced option returned 11.0% 1, ranking it the fourth best of the 50 largest (according to funds under management) surveyed Australian super funds. 2 Most of our pre-mixed options also exceeded their respective peer group medians over these periods and, in most cases, also ranked in the top quartile. We re a MySuper-authorised fund UniSuper is authorised to offer MySuper. MySuper is the Government-driven initiative for members default superannuation contributions. It is designed to protect members through ensuring certain rules are met in relation to investment strategy, fees and insurance cover. Generally, only funds authorised to offer MySuper can accept compulsory default super contributions (Superannuation Guarantee) from employers. UniSuper has selected its Balanced option to be its MySuper investment strategy. Accumulation 2 members with any part of their account invested in our Balanced option will automatically become part of MySuper. DBD members are not able to become part of UniSuper s MySuper offering while they remain in the DBD. 1 Past performance is not a reliable indicator of future performance. 2 Source: SuperRatings Pty Ltd s Fund Crediting Rate Survey June 2015 published on 21 July 2015, A survey median was not available for all categories of investment options. It does not take into account any subsequent revisions or corrections made by SuperRatings. At the time of preparation, UniSuper was not aware of any revisions or corrections which would be materially adverse to members. Go to for details of its rating criteria. SuperRatings does not issue, sell, guarantee or underwrite this product. Award-winning fund With a string of awards and high ratings from Australia s top ratings and research agencies SuperRatings and Chant West, we re one of Australia s most award-winning super funds. SuperRatings, an independently owned superannuation research company, has awarded UniSuper a Platinum rating for its Accumulation 2 product. # SuperRatings Infinity Recognised is awarded to super funds that clearly demonstrate excellent sustainable business practices and responsible investment principles. Go to for details of its rating criteria. SuperRatings does not issue, sell, guarantee or underwrite this product. Chant West has awarded UniSuper a 5 Apples rating for its Accumulation 2 product in 2015, and Super Fund of the Year and Investments Best Fund in its 2015 awards.^ For further information about the ratings methodology used by Chant West, see UniSuper was also awarded Workplace Super Product of the Year Deluxe Choice by SelectingSuper in November This award is given to the best SelectingSuper Arated product for consistency of investment performance, value for money, insurance offering, product features, and overall quality as assessed by Rainmaker s research team.* # SuperRatings Fundamentals Report: UniSuper Accumulation Super (2), 30 September Issued by SuperRatings Pty Ltd ABN: , AFSL (SuperRatings). ^ See Chant West Super Fund Ratings at Chant West Pty Limited ABN Chant West has given its consent to the inclusion in this PDS of the references to Chant West and the inclusion of the logos and ratings provided by Chant West in the form and context in which they are included. * See Selecting Super awards at au/awards. Issued by Rainmaker Information Pty Ltd ABN , AFSL

8 6 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview Generous employer contributions Your employer makes contributions that are well above those required by government Superannuation Guarantee legislation, which, when combined with your member contributions, can help you build your retirement savings. Spouse Accounts You ve built your life together, so it makes sense to secure a financial future together. UniSuper Spouse Accounts may help you and your partner achieve the retirement you deserve. You don t have to be married to open a Spouse Account If you re a UniSuper member, we recognise a spouse as being a person who: you are legally married to; is in a relationship with you (whether of the same or opposite sex), and the relationship is registered under an Australian state or territory law, or is in a relationship with you (whether of the same or opposite sex), and you live together on a genuine domestic basis as a couple. To open an account for your spouse, you need to have a current UniSuper account yourself. You can read more information on this and the Spouse Account membership entitlements in the Spouse Account PDS available at unisuper.com.au/pds or by calling us on More about us At unisuper.com.au/governance you will find any information about the Trustee which we re required to disclose to members (such as executive remuneration). You can find our MySuper dashboard at unisuper.com.au/mysuper/mysuperdashboard. How UniSuper s standard DBD and Accumulation 2 contribution rates compare to the standard Government contribution rate 7% 2 post-tax employee contributions into defined benefit component 7% 2 post-tax employee contributions 3% pre-tax employer contributions into accumulation component (if applicable) 14% pre-tax employer contributions into defined benefit component Unisuper DBD super contributions 9.5% pre-tax employer contributions standard government contributions required Unisuper Accumulation 2 super contributions 17% pre-tax employer contributions (or 14% if applicable) 2 Contribution flexibility allows most members to reduce how much they pay down to zero.

9 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview 7 We can help you make informed decisions Attend one of our free seminars or webinars As a UniSuper member, you can come along to one of our many face-to-face seminars held on and off-campus in locations around Australia. This is a great opportunity for you to learn more and ask questions about all sorts of super and pension-related topics. We also offer live webinars which you can attend from the comfort of your own computer. See unisuper.com.au/learning-centre/seminars to find out more. Online learning tools Our online Learning Centre lets you learn at your own pace, with videos, tutorials and calculators to help simplify some of the more complex aspects of super. Manage your account online You can also keep track of your super with MemberOnline. This secure, personalised portal lets you update your details, make investment switches, keep an eye on your account balance, contributions and insurance, and do a range of other things to help you stay in control. it s not too late No matter your stage of life, it s never too late or early to plan your financial future. Contact UniSuper Advice on CFP, CERTIFIED FINANCIAL PLANNER are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd (FPSB). Financial Planning Association of Australia Limited is the marks licensing authority for the CFP Marks in Australia, through agreement with FPSB. Financial advice for members through UniSuper Advice UniSuper offers the opportunity to access financial advice as part of its services to members. UniSuper Advice is operated by UniSuper Management Pty Ltd, which is licensed to provide financial product advice to members. This means you can get financial advice from someone who understands the Fund and the higher education and research sector. The advice service operates exclusively for UniSuper members and their spouses. It offers personal advice over the phone (super advisers) and face-to-face comprehensive advice. Super advisers can help over-thephone on a few issues, including super contributions, investment options and insurance as they relate to your UniSuper account, as well as non-super areas. UniSuper also offers comprehensive advice in areas including retirement planning, insurance, non-super investments and accumulating wealth. UniSuper requires its advisers to achieve a high standard of relevant education. Nearly all our advisers have tertiary qualifications, many in financial planning or related disciplines, and almost all of our comprehensive advisers have the internationally-recognised CERTIFIED FINANCIAL PLANNER (CFP ) certification delivered by the Financial Planning Association of Australia (FPA). This requires advisers to meet a professional Code of Conduct and possess attributes and skills around the Es : ethics, education, experience and examination. UniSuper Advice operates on a fee-forservice basis. If you request personal advice services, UniSuper Advice will provide you with a quote before you proceed or incur any personal advice service fees. UniSuper advisers are salaried employees and don t receive any commissions.

10 8 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview Accumulation 2 member, Jill Azmi, the University of Sydney

11 9 How super works Superannuation (super) is a way to save for your retirement which is, in part, compulsory. It is a long-term investment and designed to provide you with a nest-egg to help you fund your retirement. What is super and why do we have it? Before the introduction of compulsory super, most Australians generally relied on the government-funded Age Pension and their own savings to fund their retirement. At its core, our compulsory super system seeks to help Australians prepare for and fund their retirement. It does this by compelling people to put aside a portion of their salary while they re working. Over time, it is intended that compulsory super will increasingly supplement the reliance on the Age Pension, and even fully-fund retirement for many Australians. The fundamentals Key features of Australia s superannuation system include: compulsory contributions to super these are made from your salary through the Superannuation Guarantee (SG) tax advantages most people s super will be taxed at a lower rate than similar investments outside of super cost-effective insurance cover many funds offer cover for death, disablement and income protection, at prices which may be lower than similar cover purchased outside of super limited access you can only access your super in specific circumstances. CONTRIBUTING TO SUPER At UniSuper, you can make a range of different types of contributions to your account, for example, employer contributions, standard member contributions, voluntary contributions, rollovers (i.e. transfers from other funds) and, if you meet the eligibility criteria, government co-contributions. There are limits, called contributions caps, on how much you can contribute to your super each financial year and still receive concessional tax treatment. It s your responsibility to monitor the total contributions made each year into your UniSuper account and to any other super accounts you have to ensure you don t exceed the caps (unless it s part of your contribution strategy to do so). You can monitor your account by logging onto MemberOnline at our website. For more information on contributions and contribution caps see page 48.

12 10 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview TAX ADVANTAGES Super can be a tax-effective way to save and invest because of the tax concessions (favourable tax treatment) it attracts. You can read more about how super is taxed on page 77. Your super is one of the most important and may be one of the biggest investments you will have. Take the time to read through this PDS to work out the best options for you. INSURANCE COVER If you re eligible, DBD and Accumulation 2 membership offers different types of default and optional insurance cover, each provided in different ways. You need to consider carefully what s right for you. See page 60 for more information, and read our Insurance in your super booklet at unisuper.com.au. ACCESSING YOUR SUPER Super is designed to provide you with an income in retirement, so there are restrictions on withdrawing your money to protect your balance and keep it invested until you need it. You usually can t access your super until you re aged between 55 and 60 and retired, but there are some special circumstances when you can withdraw it earlier. There may be additional restrictions imposed on the DBD. For more information on accessing your super see page 65. What does it mean? Standard member contributions Members of the DBD or Accumulation 2 are required to make 7% standard (aftertax) member contributions. Members can elect to reduce this level under contribution flexibility arrangements, however this can have important implications for their final benefit (see page 49 for more information). Voluntary member contributions Voluntary member contributions are those contributions made over and above your standard member contribution level. For DBD members, it s important to note that voluntary member contributions are allocated to the accumulation component of your benefit.

13 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview 11 You ve just become a DBD member. Congratulations and welcome! Getting started. Page 12 What is the DBD? Page 28 Defined Benefit Which style of super should I choose? Page 22 Accumulation 2 How does Accumulation 2 work? Page 42 How much can I contribute? Page 31 How do I invest my accumulation component? Page 58 What are inbuilt benefits and insurance options? Pages months to decide. Page 26 How do I invest my super? Page 58 How much can I contribute? Page 43 What if I become ill? Page 36 What if I become ill? Page 45 What are my insurance choices? Page 45 Already a UniSuper member but your super s changed? Page 21 Who receives my benefit if I die? Page 81 Who receives my benefit if I die? Page 81 What happens if I leave my employer? Page 67 I ve just retired. What do I do? Page 4 What happens if I leave my employer? Page 67 I ve just retired. What do I do? Page 4

14 12 Getting started: a guide to your decisions To help guide you through the decision-making process, we have provided a range of topics you may want to consider. Remember, before making any decision you may also want to obtain professional financial advice. What style of super will you choose? You are now a DBD member. Read the information on page 18 for a summary of the key features of the DBD and Accumulation 2 and the detailed information in Sections 02 and 03. Remember, you have 24 months 3 to decide whether to permanently transfer to Accumulation 2. See page 26 to learn more. What level of contributions do you want to make? Decide what level of member contributions you d like to make (known as contribution flexibility). Limits apply to the amount of contributions you can make each financial year (see page 48). How do you want to invest your super? Accumulation 2 members With our wide range of investment options, you can tailor your account to suit your individual needs. You can choose the way contributions made to your account and any transfers into your account are invested. Over time you can change these strategies without changing the way your account balance is invested. You can also change the investment options for your existing account balance. Read the How we invest your money booklet at unisuper.com.au/pds for more information. DBD members You can only choose how the accumulation component (see definition on page 87) of your account is invested. You should read How we invest your money together with this PDS prior to making any decisions about your super available at unisuper.com.au/pds. Choosing or changing your investment options in your accumulation component/account can be completed quickly and easily through MemberOnline. 3 You have 24 months from when your Defined Benefit Division/Accumulation 2 application form is accepted by UniSuper, or the first employer contribution paid on your behalf is accepted by UniSuper (or as determined by us) to decide whether to stay in the DBD or transfer your benefit to Accumulation 2. Once you have made your decision, you can t change your mind. Your decision will continue to apply throughout the life of your UniSuper membership. If you don t elect to transfer to Accumulation 2 within this period, you will remain a DBD member.

15 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview 13 Do you want Inbuilt Benefits? DBD members DBD members can claim an inbuilt benefit in the event of death, disablement, temporary incapacity and terminal medical condition. Inbuilt benefits are self-insured by UniSuper and the value of the benefit is determined by a formula in the Trust Deed. Inbuilt benefits are compulsory and DBD members can t opt out of them. Accumulation 2 members If DBD members choose to transfer to Accumulation 2, their inbuilt benefits cease and are converted to external Death, Total and Permanent Disablement (TPD) and Income Protection cover through our Insurer if they re eligible for this cover this is known as transitioned cover. A pre-existing condition (PEC) exclusion will apply to some or all of this external cover for between 12 months and three years, depending on when they transfer from the DBD. To find out how the DBD s inbuilt benefits are converted to unitised external cover, and the terms, conditions and restrictions that apply to this cover, read the What happens to your inbuilt benefits if you choose Accumulation 2? important information booklet which is incorporated by reference in this PDS and available at unisuper.com.au/pds. Accumulation 2 members can opt out of the external insurance cover. The type and level of cover provided is determined by the group insurance policies UniSuper has with our Insurer. For more information on the terms and conditions that apply to the external insurance cover read the Insurance in your super important information booklet (incorporated by reference in this PDS), available at unisuper.com.au/pds. Do you want additional insurance cover? You re automatically provided with inbuilt benefits as part of your DBD membership. These benefits are designed to protect you financially if you become temporarily or permanently unable to work due to illness or injury, and provide benefits for your loved ones on your death. Eligible members also receive default external Death and TPD cover through our Insurer when first joining UniSuper. This default cover is in addition to inbuilt benefits provided to DBD members. You can opt out of this cover or apply for changes to your default external cover if you re eligible and decide it s right for your personal situation. Who do you want to receive your benefit in the event of your death? You have the option of making a preferred beneficiary nomination or a binding death benefit nomination (see pages 81-83). Do you need to see a professional financial adviser to help you make the decisions that are best for you? Consider seeking advice from a qualified financial adviser to ensure the decisions you make are the right decisions for you.

16 Compare Features at a glance DBD membership Accumulation 2 membership Contributions Up to 17% employer contributions Go to page 28 Go to page 43 7% standard member contributions (after-tax) Go to page 28 Go to page 43 Ability to reduce level of standard member contributions (contribution flexibility) Go to page 49 Go to page 49 Ability to make standard member contributions on a before-tax (salary sacrifice) or after-tax basis Go to page 48 Go to page 48 Regular and lump-sum voluntary member contributions accepted on before-tax (salary sacrifice) or after-tax basis Into your accumulation component only. Go to page 31 Go to page 43 Ability to split super contributions with your spouse From your accumulation component only. Go to page 6 Go to page 6 Rollovers Rollovers from other funds accepted Into your accumulation component only. Go to page 10 Go to page 10 Investments Choice of how your super is invested For your accumulation component only. Go to page 58 Go to page 58 The value of your benefit is directly determined by the performance of your investment options For your accumulation component only. Go to page 34 Go to page 42 Inbuilt benefits In the event of temporary incapacity, disablement, terminal medical condition and death you may receive inbuilt benefits if you are eligible. Inbuilt benefits are compulsory and determined by a formula in the trust deed. They contain a component which is self-insured by UniSuper. Go to page 36 Inbuilt benefits cease if you choose to transfer to Accumulation 2. See the important information booklet What happens to your inbuilt benefits if you choose Accumulation 2? to learn more.

17 Insurance You receive one unit of death and TPD insurance cover automatically when you first join UniSuper, provided you meet the eligibility criteria. You can apply for more cover if you need it or you can opt out altogether. If you choose Accumulation 2, your inbuilt benefits will also be transitioned to Death, TPD and Income Protection insurance cover (if you re eligible). This is in addition to your default cover. Go to page 33, and read the important information booklet Insurance in your super which is incorporated by reference in this PDS. Go to page 42, and read the important information booklets Insurance in your super and What happens to your Inbuilt Benefits if you choose Accumulation 2? which are incorporated by reference in this PDS. Beneficiaries Options when nominating beneficiaries for your death benefit Go to page 81 Go to page 81 Risks of super Investment Accumulation component only Go to page 62 Go to page 62 DBD Go to page 25 That Clause 34 may be enacted, requiring a change or reduction to the formula used to calculate your defined benefits Go to page 30 General Go to page 61 Go to page 61 Fees You may be charged a range of fees and other costs which may be deducted directly from your account, from the returns on your investment, or from UniSuper s assets. You should read all the information about fees and costs to understand their impact on your account. Go to page 69 Go to page 69

18 16 Choose your style of super Everyone has different needs when it comes to managing their super. That s why, as a UniSuper member, you re given the opportunity to choose a style of super that suits you. UniSuper members can choose either defined benefits, where your final benefit is determined by a formula, or accumulation super that lets you decide how your super is invested. Both options also offer different benefits if you become unable to work, are disabled or die. Here we illustrate how the respective components are comprised for typical DBD and Accumulation 2 members. Accumulation 2 benefit Up to 17% employer contributions + any standard member contributions, voluntary contributions, rollovers, investment returns (positive or negative) -- any fees, costs, charges, insurance premiums and taxes Defined benefit component 14% employer contributions + standard member contributions (if any) Accumulation component Accumulation 2 benefi 3% employer contributions Up to 17% employer co (if applicable) + any standard membe + any voluntary member voluntary contributio contributions, rollovers, investment and returns ( investment returns -- any (positive fees, costs, charg or negative) and taxes -- any fees, costs, charges, insurance premiums and taxes Accumulation component 3% employer contributions (if applicable) + any voluntary member contributions, rollovers, and investment returns (positive or negative) -- any fees, costs, charges, insurance premiums and taxes

19 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview 17 Some of the key differences between the DBD and Accumulation 2 DBD Generally greater protection from market downturns with the pooling of assets across the membership, the DBD provides benefits that are not directly subject to volatile market movements. Salary-linked benefits these generally provide members with an increased ability to more effectively estimate their benefit at retirement. Inbuilt death and disablement benefits (you can t opt out of these benefits). Generally steady, stable, reliable growth. What is best for you? When deciding what is best for you, there are many factors to consider. We ve outlined a few of those factors, but we have not considered your personal objectives, financial situation or needs. For that reason, you should consider the appropriateness of the above information for you, having regard to your own circumstances and read the other relevant sections of this PDS, including the risks. You may want to consider seeking professional financial advice before making your decision, as well as accessing a range of helpful resources at unisuper.com. au/choosingyoursuper. ACCUMULATION 2 Ability to select your own mix of investment options for your whole account by choosing the strategy that works for you. Accumulation 2 members do not receive inbuilt death and disablement benefits instead, inbuilt benefits will cease and they will receive external Death, TPD and Income Protection insurance cover through our Insurer (transitioned cover). A PEC exclusion will apply to some or all of the external cover Accumulation 2 members receive when transferred from the DBD. Depending on when the transfer to Accumulation 2 occurs, the PEC exclusion will apply for a period of between 12 months to three years.* Accumulation 2 members can opt out of their insurance cover, scale it up or down, or mix and match the level and type of cover to suit their personal circumstances. Easy to track account changes over time, because your account grows with contributions and investment returns (which can be positive or negative) similar to a bank account. Highly portable super account. Take us with you if you change jobs or leave the sector. * For more information on the kinds of restrictions, exclusions or limitations that may apply and to see if you re eligible read the Insurance in your super and What happens to your inbuilt benefits if you choose Accumulation 2? important information booklets (incorporated by reference in this PDS), available at unisuper.com/pds.

20 18 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview What are the DBD and Accumulation 2? With both styles of super, you re saving money for your retirement, but each uses a different method to arrive at the end amount. The Defined Benefit Formula 5-Year benefit salary Benefit service Lump sum factor Average service fraction Average contribution factor Defined Benefit Division As a DBD member, your super benefits at retirement are mainly calculated using the formula above. For information about the formula applicable to other forms of exit, refer to page 34. Although DBD money is still invested, market fluctuations are less likely to directly affect your final benefit and it is the fund that bears most of the investment risk. One risk of the DBD is that if the pool is insufficient to cover the DBD obligations, your defined benefit may be reduced. Your DBD benefit is made up of two parts or components an accumulation component and a defined benefit component. If you receive employer contributions at the rate of 17%, 3% of that is directed to your accumulation component. (Note that these rates can be different if you choose contribution flexibility, which you can read more about on page 49.) You can choose how your accumulation component is invested, with this component influenced by the amount of contributions you make towards it and the performance of investment markets. You are provided with inbuilt death and disablement benefits as part of your membership. These include temporary incapacity, terminal medical condition, disablement and death benefits. You re also provided with one unit of default Death and TPD external insurance cover on competitive terms through our Insurer. For more detail about how the DBD works please read page 28.

21 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview 19 DBD member, Professor Marshall Lightowlers, the University of Melbourne Accumulation 2 With accumulation-style super, you can choose how your whole account is invested and your super balance is influenced by the amount of contributions you make and the performance of investment markets. Your benefit is simply your account balance when you retire or leave UniSuper, regardless of your age at the time. It can be helpful to think about accumulation super as similar to a bank account, but with lots of choice regarding your investments and insurance allowing you to shape it to meet your needs. If you transfer to Accumulation 2, your inbuilt benefits will cease and you will instead receive Death, Total & Permanent Disablement (TPD) and Income Protection insurance cover (if you re eligible). This insurance cover is provided through group insurance policies the Trustee has taken out with our Insurer and some or all of the cover you receive will have a PEC exclusion applied for a period of between 12 months to three years. For more information on how PEC will apply to transitioned external cover, please read the Insurance in your super important information booklet (incorporated by reference in this PDS), available at unisuper.com.au/pds. To find out more about what happens to your death, disablement and temporary incapacity benefits if you transfer to Accumulation 2, including how we determine the level of external insurance cover you receive on transition and the kinds of restrictions, exclusions or limitations that may apply, read the Insurance in your super and What happens to your inbuilt benefits if you choose Accumulation 2? booklets, incorporated by reference in this PDS. While you won t have inbuilt benefits as an Accumulation 2 member, you will have insurance cover which you can tailor to meet your personal needs. To find out about the terms, kinds of restrictions, exclusions or limitations that may apply to the insurance cover provided to Accumulation 2 members, read the Insurance in your super booklet, incorporated by reference in this PDS. For more detail about how Accumulation 2 works please read page 42.

22 20 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview Insurance and Inbuilt Benefits You re generally also provided with one unit of default Death and TPD external insurance cover when you first join UniSuper. This is known as default cover. If you choose to transfer to Accumulation 2, the inbuilt benefits you have as a DBD member will cease and will be transitioned to unitised external insurance cover. A PEC exclusion will apply to some or all of the transitioned cover. To find out if you re eligible, how we determine the level of cover you receive upon transferring to Accumulation 2, and the kinds of restrictions, exclusions or limitations that may apply you should read the Insurance in your super and What happens to your inbuilt benefits if you choose Accumulation 2? booklets together with this PDS available at unisuper.com.au/pds.

23 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview 21 Joining UniSuper or transferring to the DBD If you re 65 or younger and the terms of your employment mean that you are eligible to join the DBD, simply follow these simple steps to get started. Other Account/s Defined benefit UniSuper Account Accumulation 2 Read this PDS and the important information referred to in the PDS. Complete the Defined Benefit Division/ Accumulation 2 application form and return it to your employer. If you don t complete the Defined Benefit Division/ Accumulation 2 application form, you will be deemed to be a DBD member from the date UniSuper first accepts an employer contribution on your behalf or such other date as determined by UniSuper. If you want to transfer any other super you have to your UniSuper account, complete the Combine my super (rollover) form and return it to us or use our easy online rollover tool available at unisuper.com.au. Make a decision within the first 24 months of membership about whether you want to remain in the DBD or transfer to Accumulation 2 (refer to page 26). For more information read the Choosing your style of super fact sheet available on our website. Before you make any decision make sure you seek financial advice.

24 22 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview Still not sure which type of super will suit you best? The following questions are just a few of the things you might want to consider in making your decision but we have not considered your objectives, financial situation or needs. For that reason, you should carefully consider this information and how it applies to your personal circumstances. Do you like the idea that part of your benefit will be determined by a formula? Your DBD benefit (excluding any accumulation component) is based on a formula that generally takes into account your age, benefit salary, period of service, average service fraction, and average contribution fraction. Generally greater protection from market downturns The defined benefit component of your super is not directly subject to market volatility, as investment returns do not directly change the formulas used to calculate these benefits. However, this also means that you may not reap the rewards when the investment markets are producing good returns. Salary-linked benefits These may provide members with an increased ability to more effectively estimate their benefit at retirement. The payment of defined benefits is subject to the risks that the DBD will not have sufficient assets to meet all obligations to its members. These risks are explained on page 30. You should bear in mind the possibility that reductions in the level of defined benefits may be made. How long do you expect to remain employed by a UniSuper employer?* The DBD is more likely to be suited to members who expect that they ll be employed within the higher education and research sector for a reasonable period of time. * A UniSuper employer is an employer that has entered into a participation agreement with the Trustee. To find out if this applies to your employer, please call us on

25 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview 23 Age-based lump sum factors and time in the higher education and research sector While employer contributions to the DBD are made at the same percentage of pay for most DBD members, the lump sum factors that are used to calculate a member s ultimate defined benefit increase with age. Lump sum factors are based on the member s age when he/she leaves the DBD (not the age at which the member joins the DBD). The table on page 90 shows how the lump sum factor changes as a member nears retirement age. Do you know when you plan to retire? DBD members can generally better plan their benefit at retirement with greater certainty than accumulation members. It is important to note that the age at which a member leaves the sector determines their lump sum not their joining age. The member s salary and service also play a very important role. Do you want control over the way your super is invested? With Accumulation 2, you can choose how all your super is invested from our range of available investment options. In the DBD, you only choose how your accumulation component is invested. External insurance cover or inbuilt benefits? If you choose to transfer to Accumulation 2, your inbuilt benefits will be transitioned to unitised external insurance cover provided through our Insurer (if you are eligible). A PEC exclusion will apply to some or all of the transitioned cover. Once you receive this external insurance cover you can tailor it to suit your personal circumstances.* As a DBD member you are provided with inbuilt temporary incapacity, terminal medical condition, disablement and death benefits as part of the DB benefit design, subject to eligibility criteria. These benefits are calculated based on a formula set out in the Trust Deed and contain an inbuilt component which is selfinsured by UniSuper. It can be helpful to think of these as similar to insurance benefits, but you can t opt out of them because they re built into your overall DBD membership. Eligible DBD members may also receive and pay for one unit of default Death and TPD or Deathonly cover through our Insurer. You can apply for more cover or opt out of the default cover if you want to. What about fees and costs? As a DBD member, fees, costs, taxes and charges (including those for inbuilt benefits) are accounted for in the formula used to calculate your defined benefit. Applicable fees, costs and taxes relating to the accumulation component and premiums for insurance cover (if applicable) are deducted from your accumulation component. As an Accumulation 2 member, fees, costs, taxes and premiums for insurance cover (if applicable) are deducted from your account. Read the Fees and costs section on page 69 to find out more. * To find out how we determine the level of cover your receive on transferring to Accumulation 2, as well as any restrictions, exclusions or limitations that may apply and to see if you re eligible read the Insurance in your super and What happens to your inbuilt benefits if you choose Accumulation 2? booklets available at unisuper.com/pds.

26 24 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview DBD member, Dale Teasel, Senior Groundsman at The University of Sydney

27 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview 25 Risks of super All investments, including super, have some level of risk. The types of risks your super may be exposed to can be broadly categorised as either general or investment risks, and include operational risk, legislative risk, inflation risk, investment option risk and so on. There are also risks associated with your membership category. There are differences in risks for DBD members and Accumulation 2 members. When considering your investment in super, it s important to understand that: the value of investments will vary and go up and down the level of investment returns will vary and future returns may differ from past returns investment returns are not guaranteed and you may lose some of your money super laws may change in future your future savings (including contributions and returns) may not be enough to provide adequately for your retirement the appropriate level of risk for you will depend on a range of factors including your age, your investment time frame, your other investments and your personal risk tolerance. Risks specific to DBD members For DBD members, defined benefits are based on a formula that takes into account your age, benefit salary, period of service, average service fraction and average contribution factor. Defined benefits are supported by a pool of assets into which your employer contributes and which we invest in a diversified portfolio of investments. The DBD is designed so that in the longer term investment returns are expected to be sufficient to provide for UniSuper s defined benefits, although this is not guaranteed. In addition, over short periods the funding position may vary with investment volatility. The main risks to your standard of living in retirement are that you do not contribute enough in standard member contributions or your period of service is not long enough to produce an adequate final benefit. There is, also, a risk that the defined benefit pool is or could be insufficient to meet all obligations to DBD members, in which case your defined benefit may be reduced. More information about this risk is provided on page 30 under the heading Risks associated with defined benefits. The accumulation component for DBD members is also subject to investment risk. For more detail on these differences and to read more about the risks mentioned, read pages 61 to 63.

28 26 Defined Benefit Division and Accumulation 2 Product Disclosure Statement Overview 24 months to make a decision about your membership If you are joining the DBD for the first time, you have a 24-month period from when you join to decide whether to remain in the DBD or transfer your benefit to Accumulation 2. If you do not elect to transfer to Accumulation 2 within this period, you will remain a DBD member. 24 months to decide When you join as a DBD member you will have 24 months from when your Defined Benefit Division/ Accumulation 2 application form is accepted by UniSuper, or the first employer contribution paid on your behalf is accepted by UniSuper (or such other date as determined by UniSuper) to decide whether to remain in the DBD or transfer to Accumulation 2. Once you have made your decision, you can t change your mind. If you don t elect to transfer to Accumulation 2 within this period, you will remain a DBD member. If you cease employment during your election period and the value of your defined benefit component (together with your accumulation component) is transferred to Accumulation 1, and you subsequently re-join the DBD at a later point in time, you will have a further 24-month election period from the date you re-join the DBD to make this decision, unless: your previous DBD membership was longer than the election period applicable at that time, or you ceased employment within the election period applicable at the time you were previously a DBD member, and you elected to defer your defined benefit component. Once you have made your decision, you can t change your mind. Your decision will continue to apply throughout the life of your UniSuper membership. This means that if you do not elect to transfer to Accumulation 2 within the timeframe allowed you will not be able to make an election to transfer to Accumulation 2 if you later re-join the DBD through another employer. The only way you may be able to have another election period is if you completely exit the Fund (i.e. close your account), take your entire account balance when you cease employment and then re-join through another UniSuper participating employer as a new member.